How to read this result
In the default example, total project cash is $265,000.00. Results describe this input scenario; they are not a recommendation.
Change one assumption at a time to see how it affects the scenario. Compare periods and cost definitions consistently. Negative results show a modeled shortfall; an unavailable ratio needs a valid denominator.
Formula and methodology
Add acquisition, rehab and holding cash. Refinance proceeds equal ARV times the entered LTV; deduct refinance closing costs. Remaining cash is the positive difference between project cash and net refinance cash. Annual rental cash flow divided by remaining cash gives the post-refinance cash-on-cash percentage.
Enter percentages as whole numbers: 5 means 5%. When used as a factor, the calculation divides a percentage by 100. Percentage outputs multiply the final ratio by 100. Calculations retain precision internally; displayed amounts and rates are rounded to two decimals.
Variables and input definitions
- Purchase price (USD)
- Acquisition price. Minimum: 0.
- Acquisition costs (USD)
- Closing and acquisition costs. Minimum: 0.
- Rehab cost (USD)
- User-entered rehab budget; no construction estimating. Minimum: 0.
- Holding costs (USD)
- Taxes, utilities, insurance, interest and other holding costs. Minimum: 0.
- After-repair value (ARV) (USD)
- User-entered estimated ARV. Minimum: 0.
- Refinance LTV (%)
- User-entered refinance LTV assumption. Minimum: 0. Maximum: 100.
- Refinance closing costs (USD)
- Refinance fees/closing costs. Minimum: 0.
- Annual rent (USD/year)
- Annual rental income after stabilization. Minimum: 0.
- Annual operating expenses (USD/year)
- Operating expenses. Minimum: 0.
- Annual debt service after refinance (USD/year)
- User-entered annual debt service after refinance. Minimum: 0.
Worked example
This example uses the exact prefilled inputs above. Reset defaults to restore this scenario after making changes.
| Item | Default scenario |
|---|---|
| Purchase price | $200,000.00 |
| Acquisition costs | $5,000.00 |
| Rehab cost | $50,000.00 |
| Holding costs | $10,000.00 |
| After-repair value (ARV) | $350,000.00 |
| Refinance LTV | 75.00% |
| Refinance closing costs | $5,000.00 |
| Annual rent | $36,000.00 |
| Annual operating expenses | $12,000.00 |
| Annual debt service after refinance | $18,000.00 |
| Item | Default scenario |
|---|---|
| Total project cash | $265,000.00 |
| Refinance amount | $262,500.00 |
| Net refinance cash | $257,500.00 |
| Cash left in deal | $7,500.00 |
| Annual cash flow | $6,000.00 |
| Cash-on-cash after refinance | 80.00% |
Assumptions and limitations
Refinance eligibility, appraised value, seasoning rules, rates and loan costs are lender-specific and are not predicted by this calculator.
Results describe this input scenario; they are not a recommendation.
The tool uses values you supply. It does not retrieve market prices, verify leases or inspect a property. Results exclude items outside the listed inputs. Review local requirements and the relevant contract when a payment, fee or allocation depends on them.
Common mistakes
This simplified model does not track an existing bridge-loan payoff. All project cash is treated as contributed capital; insert a net refinance assumption consistent with your actual funding.
Sources and method references
These references provide context for the method and terminology. They do not endorse this tool or validate your property assumptions.
- Office of the Comptroller of the Currency — Comptroller's Handbook — Commercial Real Estate LendingNOI, direct capitalization, cap-rate valuation and DCF concepts for commercial real estate.
Frequently asked questions
Why does BRRRR cash-on-cash become N/A?
When modeled refinance cash recovers all project cash, the remaining-cash denominator is zero. N/A does not mean an infinite return or a risk-free investment.
Does the refinance amount include fees?
The refinance amount is gross proceeds. The next output deducts the separately entered refinance closing costs.